According to Garlinghouse, the SVB situation will not disrupt daily operations in a short tweet thread without specifics.
The Ripple CEO took to Twitter on March 12 to reassure his followers about the stability of the company and discuss its exposure to Silicon Valley Bank. Garlinghouse said Ripple had exposure to SVB, but “we anticipate no disruption to our day-to-day operations.” Moreover, Ripple already held most of its USD with a broader network of banks. His brief tweet thread was meant to reassure users. “Relax, Ripple is still in a strong financial position,” he tweeted. Many Twitter users who commented on the thread agreed with the statement.
“I never doubted you or @Ripple had taken proper risk management,” wrote one user. Ripple chief technology officer David Schwartz promised on March 11 that the company would issue a statement on its Ripple exposure “shortly,” though it is unclear whether the Garlinghouse tweet was in mind. Hours later, the Federal Reserve announced a $25 billion funding program to help banks with liquidity during times of financial stress.
In another announcement, the Federal Reserve stated that all Silicon Valley Bank depositors would have access to their funds beginning Monday, March 13. “No taxpayer losses associated with Silicon Valley Bank’s resolution will be borne,” it added.
“I still don’t understand how a run on a bank can cause it to become insolvent,” Schwartz said on March 10. If the bank was previously solvent, it means that its assets exceeded its liabilities. They would have most likely become solvent as their 10-year treasuries matured. However, due to a run, they did not get that opportunity. .”
Ripple’s XRP fell from a high of $0.40 on March 9 to a low of $0.35 on March 12 before recovering. Ripple is fighting the US Securities and Exchange Commission over the status of their XRP crypto, but a Ripple executive said 2022 will be a “record year of business and customer growth” for the company. Garlinghouse stated in January that the case would be resolved by June.